News Media Layoff Turmoil and the Limits of American Labor Law
As I witness news outlets laying off large numbers of journalists I wonder how many observers believe labor law could forestall such a development. As a former airline employee who has been through the process personally—and studied it formally and very closely since that time—I can tell you the answer is very probably “no.” The following explanation of why reveals the limits of American labor law. In a nutshell, this ain’t socialism.
At various times I reference the National Labor Relations Act—the law governing unionized media workers laid off in recent weeks. You can find it here. It is ridiculously hard to read online. One wonders why. The two most important provisions to read are Sections 8(a)(5) and 8(d). I won’t keep referencing them, but they describe the mechanics and obligations of collective bargaining. And while I think it goes without saying, perhaps I should say it: an employer can lawfully lay off a non-union employee for a good reason, a bad reason, or no reason at all. So, as flimsy as the law I’m about to discuss may be, the situation is far worse for a non-union employee than it is for a union employee covered by a collective bargaining agreement.
To begin with (in the unionized context), an employer has an obligation to bargain with its employees prior to a layoff, but only if labor costs had something to do with the layoff. If layoffs result from structural economic factors—the economy is just projected to be bad, for example—the employer’s actions are very possibly “entrepreneurial,” and “entrepreneurial subjects” are usually not covered by the employer’s legal obligation to bargain. In other words, it is a business trying to stay afloat, and no amount of labor cost concessions would have made a difference. Labor costs are what trigger the employer’s obligation to bargain.
But suppose labor costs do factor into an employer’s decision to lay off its employees. In that case, the employer has an obligation to bargain over layoffs, which thereby become a “mandatory subject of bargaining.” Here is where people who are not knowledgeable about labor law become confused. Even if an employer is obligated to bargain over layoffs, it is never required to change its layoff decision. Employers are not obligated to agree to any substantive bargaining proposal under American labor law. Usually, unsurprisingly, a union cannot offer an employer enough labor cost savings to alter its decision to lay employees off. As long as the employer bargains in good faith to “impasse” (the two sides simply can’t agree) over its decision to lay workers off, it may lawfully implement its plans/proposals. Where employers sometimes make legal errors is in the speed with which they implement a layoff decision. If, after the fact, it is determined that the union and the employer had not reached “impasse” over layoffs, and the employer implemented the layoff despite the failure to reach impasse, the employer may be forced to reverse its decision. A change by an employer in terms and conditions of employment before the union and employer have reached either good faith impasse (or agreement) is known as an unlawful “unilateral change,” the remedy for which is that the employer must return to the “status quo ante.” In my decade as a Government labor lawyer, I rarely saw an employer make this mistake. But the consequences of such an error can be quite significant. The employer must undo whatever it did without bargaining. Think about all the things that could be – literally anything having to do with “wages, hours, and other conditions of employment.” (Section 8(d) of the NLRA). And it is hard to feel sympathy—just pretend (if necessary) you care enough about workers that you are willing to notify their union before making super big changes to working conditions.
Even if the employer has no obligation to bargain over a decision to lay off, it may have an “effects bargaining” obligation to bargain over matters ancillary to the layoff. For example, the employer may be required to bargain over the order of layoffs, COBRA continuation (health care) benefits, or the possible rights of laid off employees to transfer to other portions of the employer’s business having openings. The problem here is the remedy for a violation of this bargaining duty – it is so vague and weak that I’m not even going to discuss it here.
If the union and the employer are parties to a collective bargaining agreement, the employer must of course comply with what the contract requires, or the union can file a breach of contract “grievance” respecting the noncompliance that could culminate in a private arbitration. Violations of collective bargaining agreements may also be pursued in federal court under 29 U.S.C. § 185 (Section 301 of the Labor Management Relations Act). Few employers, however, are likely to enter into a collective bargaining agreement that would significantly limit their discretion to lay employees off in response to bad economic conditions (often, exclusively as defined by the employer).
Equally obviously, the employer can’t lawfully lay off employees for the purpose of discriminating against employees to “discourage membership in a labor organization.” That would violate Section 8(a)(3) of the NLRA, and the remedy for the violation would be reinstatement with back pay. I say “obviously” operating under the assumption that Elon Musk and Bryan Palbaum haven’t (yet) succeeded in gutting the enforcement mechanisms of the NLRA on constitutional grounds. Stay tuned—they are working hard to get that done.
The final thing to say is perhaps the most important, but also the most “wonkish.” If someone tells you that 20% of your newsroom is about to be laid off you might very well become peeved and decide to picket or strike your employer. But take care. If employees strike or picket over a “non-mandatory” subject of bargaining—suppose the layoff decision is found entrepreneurial, for example—the strike and picketing may be “unprotected” and “unlawful.” Translation: employees otherwise protected when striking or picketing over working conditions would be subject to being fired and picketing may potentially be stopped (“enjoined”) by a federal court. Additionally, many collective bargaining agreements contain “no strike” pledges. Violation of such a pledge may also render a union subject to a Boys Market injunction. The union might want to argue that it is not bound by such an agreement because the layoffs are unfair labor practices. I hope I’ve persuaded you that such a contention is, at best, vulnerable to a contrary finding.
In the end, we are all “just” employees (if we are lucky). And if we work in the private sector we are all bound and “protected” by these toothless rules. It gives you a very different perspective on what the PRO Act is all about. Great wealth has built the rules over many decades and neither political party seems especially interested in what I call the “back end” of labor law. Everyone is fixated on obtaining “labor rights.” But once obtained, what do you really have?